Rahul Sachitanand
Jan 3, 2020

China sees weakest marketing M&A in past decade

Asia-Pacific deal-making slumps as companies look inward, reveals R3 Worldwide study.

China has faced increasing global trade standoffs, notably with The United States
China has faced increasing global trade standoffs, notably with The United States

Buffeted by rising global trade tensions and regulatory scrutiny, China experienced its weakest M&A activity in a decade, with deal activity in marketing services plummeting 54% in 2019, according to a new study by R3 Worldwide. Due to this decline, overall APAC deal value tumbled 55% and number of deals fell by 9%. 

“Investment in APAC has slowed, though it remains of interest to buyers wanting to address marketplace complexity in the region,” said Greg Paull, principal at R3. "Buyers have been looking at investments that will strengthen their position in an uncertain geopolitical climate.”

According to R3's findings, amongst traditional holding companies, only Publicis ranked in the top 10 acquirers, the first time so few have appeared in this list worldwide. The report revealed that the number of deals fell 50%, even though year-on-year spend remained constant. Publicis Groupe was the top buyer after dramatic M&A activity in 2019, with Dentsu leading holding groups in total number of transactions. 

R3 assessed 489 M&A deals in the marketing services industry between January to December 2019, with $27.7 billion invested, a 15% decrease in spend year-on-year. Even as holding companies faded in 2019, private equity groups contributed 44% more in deal value globally ($6.6 billion), with Bain Capital and Blackstone making two of the top five deals in 2019. 

In 2019 buyers favoured martech and adtech companies, but diversity was visible in the type of acquisitions made. Production houses and shopper/CRM/promotion companies saw double-digit growth in both number of transactions and value. “Restructuring has shifted attention away from volume and forced holding companies to attend to integration,” added Paull. “It’s been about what’s going to help win new business.”

This article is filed under...
Top of the Charts: Highlights of recent and relevant research

 

Related Articles

Just Published

1 hour ago

Visa names new APAC head of marketing

Danielle Jin will take over the position left open by the promotion of Frederique Covington Corbett to a global role.

3 hours ago

Initiative's Amy Armstrong elevated to global CEO, ...

Baxter will serve as chair of Initiative before taking up a new leadership role at IPG focused on "transforming and elevating" other areas of the group's portfolio.

4 hours ago

Indian agencies take 'no concrete steps' on mental ...

Exclusive Campaign India survey reveals that 71% of industry workers say their company has taken no steps to reduce stress, while 69% report no access to mental health services.

4 hours ago

Amazon Prime Video apologises, edits 'objectionable'...

The company's move follows protests against the content of the video series Tandav, which drew complaints against its makers and cast in Madhya Pradesh and Maharashtra in January.